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Questions and Answers
A title commitment is issued after all requirements have been met and the transaction is ready to close.
A title commitment is issued after all requirements have been met and the transaction is ready to close.
False
If a requirement cannot be met, it shall be listed in Schedule B as an exception in the title policy.
If a requirement cannot be met, it shall be listed in Schedule B as an exception in the title policy.
True
It is not essential to have the parties sign a written consent if an exception is made to the title policy.
It is not essential to have the parties sign a written consent if an exception is made to the title policy.
False
The duties of a closing agent are detailed in the real estate contract.
The duties of a closing agent are detailed in the real estate contract.
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Obligations imposed by the agency agreement with an underwriter can be ignored if they feel like not proceeding.
Obligations imposed by the agency agreement with an underwriter can be ignored if they feel like not proceeding.
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It is important to contact underwriting if there are requirements that may affect the marketability of the title.
It is important to contact underwriting if there are requirements that may affect the marketability of the title.
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A payoff statement does not need to be addressed to the title agent.
A payoff statement does not need to be addressed to the title agent.
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It is recommended to confirm all requirements are met about three weeks prior to closing.
It is recommended to confirm all requirements are met about three weeks prior to closing.
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Loan numbers are irrelevant when checking for outstanding mortgages.
Loan numbers are irrelevant when checking for outstanding mortgages.
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It's a best practice to have the borrower/seller approve the payoff statement by signing it.
It's a best practice to have the borrower/seller approve the payoff statement by signing it.
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Study Notes
Title Commitment and Policy Issuance
- Transaction begins with real estate contract, assigning closing agent roles and responsibilities.
- Loan transactions involve a contract with a lender via closing instructions.
- Title agent has contract with underwriter through an agency agreement, including underwriting guidelines, counsel consultation, and timely title policy delivery.
- All contracts (real estate, loan, and agency) should be referred to for clarification of obligations.
- Non-met obligations need written resolution before proceeding.
Commitment Schedule B1 Requirements
- Requirements are guidelines for policy issuance and transaction close.
- General requirements include payment of purchase price, premium, assessments, and taxes.
- Specific transaction requirements involve preparing deed, mortgage, releasing prior mortgages and liens.
- Met requirements are eliminated from final policy; unmet requirements may be exceptions in Schedule B.
- Written consent of parties for exception inclusion in the policy.
- Exception inclusion in the policy requires communication with underwriting to address.
Title Commitment Checklists
- Study guide includes information for marking title commitment status.
- Requirements checked and noted in your file leading up to the closing date.
- Confirmation of all met or coming requirements 3 days before closing is recommended.
Mortgage Payoff Statements
- Statements should be written, addressed to title agent, and include unconditional lender acceptance for clear amount at specific date.
- Loan numbers are important for property verification and multiple loan issues with same lender.
- Statement should include loan release, street address, and exact balance due.
- Payoff statements should be updated before closing to reflect any changed amounts or additional fees.
Home Equity Lines of Credit (HELOCs)
- HELOCs require careful review for outstanding balances.
- Policyholders must inform lenders about intent to pay/satisfy HELOC.
- Request that the HELOC account be locked and closed.
- Lender requirements must be met, including account closing documents and affidavits from the borrower.
- Payoff funds delivered with request to close and satisfy mortgage should be immediately sent to the lender.
Post-Closing Procedures
- Post-closing procedures are important for verifying satisfaction of the mortgage with records.
- Private lender releases can be more difficult to obtain than from institutional lenders.
Schedule B-2 Exceptions
- Title matters in Schedule B-2 are not insured in the final policy but may remain and affect the property.
- Exceptions can be deleted if they do not affect the property (e.g., survey data, no improvements made in 90 days).
- Confirm that exceptions are appropriately handled and that there are no issues prior to issuance of the final title commitment.
Fraudulent Wire Transfers
- Fraudulent wire transfer cases are increasing due to fraudulent parties presenting themselves as the closing agents, or sending forged instructions.
- Fraudulent activity requires verification for safety.
- Verify all information for security. Use resources for guidance and extra training.
Importance of Verification
- Verification of all details needed to prevent mistakes and errors during the closing process.
- Review for outstanding fees, penalties, and discrepancies like prepayment penalties.
- Careful review and understanding of all instructions and guidelines to avoid errors.
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Description
Test your understanding of title commitment and policy issuance in real estate transactions. This quiz covers essential documents, requirements, and the roles of various agents involved in the process. Ideal for real estate professionals and students looking to consolidate their knowledge.
